Slovenia Is Spain: Is Another European Country's Bank Bailout On The Way?

Tyler Durden's picture


Has the Spanish bank bailout set a precedent for all other insolvent EMU member countries to follow? Of course. The only question is when is the stigmata of demanding a bailout (which Europe now has no choice but to grant courtesy of set precedent, be it via ESM or otherwise) less relevant than national pride, than preserving one's banking sector, and preferably preempting the kinds of bank runs that pushed Spain to demand a bailout in the first place. For one small Eurozone member country the answer may be if not now, then very soon. Slovenia's Dnevnik asks a simple question: "How serious is the situation of Slovenian Finance - are we on the way of Spain?" The answer, in not so many words: very likely yes.

From the google translated article - highlighted section most relevant

Although at the last auction of short-term debt during the Slovenian buyers again dominated by domestic financial institutions, full of liquid assets of the European Central Bank (ECB), were required average yields are relatively high, recalls Primoz Cencelj of KD Funds.... In exchange for 60.373 million, the government should provide a 0.9 percent annual return, which is 0.1 percentage points more than the auction just over a month ago. Perhaps even more concern is that Slovenia had offered to investors for 0.05 per cent higher rate than at the end of May Spain, which are currently both sentenced to issue short-term debt securities.

Just the Spanish case most striking, as it reflects the growing number of parallels with Slovenia. They offer themselves as the question whether Slovenia is on track to follow Spain and Europe ask for recapitalization of banks. "Despite the similarities between the two economies, Slovenia is still quite far from the Spanish scenario," said economist Igor Masten, who estimates that the delay in the Spanish economy worse, while weak compared to the material condition of the Spaniards over-indebtedness of Slovenian companies. Here, the similarities do not end because the two sectors, the total Grants of high exposure to real estate sector, the crisis has so brutally crushed. Banks' balance sheets in the Iberian peninsula and on the sunny side of the Alps are therefore imbued with bad investments and desperately needed injection of fresh capital. The Slovenian banks should be around 4 billion euros of bad loans, which represents about 8 percent of total assets. On the hair-like figures are from Spain, where they take up bad assets of investment banks 8.37 percent or more than 150 billion euros. The Spanish Government had therefore been to seek financial support in Europe, while Slovenia will have, at the probable lack of interest of foreign investors' funds to recapitalize banks to provide itself.

But time is no longer in abundance, although the government to purchase Co Co bonds, at least temporarily solve the equity problems of NLB. This is a problem in the banking sector will not be removed, similarly as in Spain, the real problems of the information in the financial market does not lie in the largest bank. Threats to Asia to greater capital hole, the unofficial information is exposed by Nova KBM and Abanka as well as some smaller banks in domestic ownership, which can be fatal effect on the banking system and compels the country to seek assistance from the European Fund for the Permanent Protection euro (ESM). "It may not even be helpful," says Cencelj, which estimates that around 3.5 billion euros, at least for some time solve the banking problems. Search resources in the financial markets would be on the other hand, are much more expensive, because the required yield on ten-year bonds Slovenian stay in the area between 5.5 and six per cent.

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Thu, 06/14/2012 - 10:48 | 2525595 SilverTree
SilverTree's picture

This is getting fun!

Thu, 06/14/2012 - 10:53 | 2525620 battle axe
battle axe's picture

A comedy of errors.....

Thu, 06/14/2012 - 10:58 | 2525641 sunaJ
sunaJ's picture

A confederation of dunces...

Thu, 06/14/2012 - 11:01 | 2525653 SHEEPFUKKER


Thu, 06/14/2012 - 11:41 | 2525873 Manthong
Manthong's picture long as their bailout is "unconditional".

Thu, 06/14/2012 - 11:31 | 2525830 Chaffinch
Chaffinch's picture

Fun indeed!
We used to have PIIGS - then some ZHers spend hours creating more acronyms to allow for France, the UK, Cyprus etc. If we add Netherlands and now Slovenia, we get, err, Frickin Piss (as Charlie on 2.5 men might have put it!)

Thu, 06/14/2012 - 10:50 | 2525601 Croatian Patriot
Croatian Patriot's picture

Old news!

Thu, 06/14/2012 - 10:50 | 2525605 slaughterer
slaughterer's picture

Germany is thinking of applying for a bailout as well.  Too many Landesbank and Bundestaat in trouble.  

Thu, 06/14/2012 - 10:50 | 2525606 JailBank
JailBank's picture

Up next Lichtenstein? How is Vatican City on funds?

Thu, 06/14/2012 - 11:03 | 2525662 Caviar Emptor
Caviar Emptor's picture

San Marino to bail out Andorra

Thu, 06/14/2012 - 11:19 | 2525771 bigwavedave
bigwavedave's picture

South Americans and Philipinos have had a good couple of years. Cashed up I would say.

Thu, 06/14/2012 - 11:05 | 2525610 hedgeless_horseman
hedgeless_horseman's picture



Slovenia is not Iceland?


Thu, 06/14/2012 - 10:51 | 2525614 Snakeeyes
Snakeeyes's picture

But the Spanish bailout isn't working. Spain 10 year sov yield up again, unemployment increasing, house prices declining,

They should film AMC's "The Walking Dead" in Spain. They wouldn't have to pay for makeup.

Thu, 06/14/2012 - 10:54 | 2525625 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture


Thu, 06/14/2012 - 10:54 | 2525626 LULZBank
LULZBank's picture

The Slovenian banks should be around 4 billion euros of bad loans

They can probably earn that much as commission, brokering a deal for Spanish bailout.

Thu, 06/14/2012 - 10:55 | 2525631 robf355
robf355's picture

So Slovienia needs 3.5 billion euros, and their contribution to the EFSF is 3.6 billion, something doesn't add up

Thu, 06/14/2012 - 10:58 | 2525639 LULZBank
LULZBank's picture

Rounding error?

Thu, 06/14/2012 - 10:59 | 2525643 Magnum
Magnum's picture

Slovenia is a rich country with a lot of resources.

Thu, 06/14/2012 - 11:12 | 2525688 hedgeless_horseman
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Which is why it has been targeted.  Those resources and wealth must be liberated.

Read this book: Confessions of an Economic Hitman.

Thu, 06/14/2012 - 12:49 | 2525785 ThirdWorldDude
ThirdWorldDude's picture

They also have a socialist gubbermint since 2008(proudly declaring themselves successors of the Yugoslavian commies):

"According to the Institute of Macroeconomic Analysis and Development of Slovenia, 'consolidated gross debt of the general government, having totalled €13.7 billion at the end of last year (38.1% of GDP), increased to €16.4 billion (45.2% of GDP) by the end of the first quarter this year'... Slovenian budgetary debt is growing [at] a speed of almost €10 million per day."


edit: what's with the downtick? I didn't make those facts up, but I've surely hit a socialist nerve...

Thu, 06/14/2012 - 23:24 | 2528198 StychoKiller
StychoKiller's picture

Next up:  Pottsylvania!

Thu, 06/14/2012 - 11:39 | 2525864 No Euros please...
No Euros please we're British's picture

yup, if it has gold reserves it's just begging to be liberated.

Thu, 06/14/2012 - 13:56 | 2526394 Don Diego
Don Diego's picture

correct, and also the Slovenian population is way too white....they could use some diversity, why don't they open their borders to those poor Sudanese stuck in Israel?  

Thu, 06/14/2012 - 11:22 | 2525791 Abraxas
Abraxas's picture

What resources? All their raw materials are coming from Bosnia, and all their exports are going back to ex-Yugoslav states.

Thu, 06/14/2012 - 12:10 | 2525985 GeneMarchbanks
GeneMarchbanks's picture


Trading patterns die hard, eh? I think he was referring to ones the Germans bought up.


Thu, 06/14/2012 - 19:09 | 2527521 koperniuk666
koperniuk666's picture

Doh! Let me guess..... you have never been there....right? (I Have)

Slovenia is;

1. Tiny

2.Has few resources

3. Is overpriced ( perhaps thats what you mean by 'rich')

4. Is quite pretty.


You Meerkans need to get out and visit these places before you PONTIFICATE.


Thu, 06/14/2012 - 11:00 | 2525648 youngman
youngman's picture

First one in wins....or out...or crys wolf....or has sex with a secret service agent...

Thu, 06/14/2012 - 11:03 | 2525659 Dr. Engali
Dr. Engali's picture

This doesn't even make sense. These countries are borrowing money at a higher rate to contribute to the bail out fund at a lower rate which they seek to get a bail out from. Who thinks this shit up?

Thu, 06/14/2012 - 11:10 | 2525702 walküre
walküre's picture

Private bankers of course. Nobody else stands to benefit from this bullshit.

Their scheme has become blatantly obvious and more and more people in Europe are connecting the dots.

Thu, 06/14/2012 - 11:47 | 2525893 Ghordius
Ghordius's picture

that's so true. +1

though there is another dimension to that. every european country wants to keep it's banking system under it's thumb (more or less) because they dread being under a banking cartel's thumb (happened very often). it gives them more leeway with the management of their debt. of course this is getting murkier and murkier, but as I wrote last year europeans are famous for nationalizing their banking systems if they feel the pinch. not yet, though, not yet...

Thu, 06/14/2012 - 11:57 | 2525927 GeneMarchbanks
GeneMarchbanks's picture

I'd say we're almost there though. We can truly and proudly proclaim T.I.N.A like no one in particular before us, and actually truly mean it this time.

The race is on, don't get left behind.

Thu, 06/14/2012 - 13:10 | 2526238 walküre
walküre's picture

what's wrong with national banks controlled by government elected by the people for the people?

better than a private central bank which manipulates government to pardon me, fuck the people?

Thu, 06/14/2012 - 15:51 | 2526969 Ghordius
Ghordius's picture

+1 walkure, they are always partners, the government + the CB + the banking system. in some cases the one dominates one of the others or both. historically, the european setup often favoured the gov on top of the banking system and the CB on the lines, as neutral as possible. Germany, Switzerland and Austria are classical cases (made even more complex by regional state banks being the shareholders of the CB, where Spain a less classical one and Italy a very special one. In the UK (and somewhat in France), the gov is usually completely on top of the CB, while the banks are kept away from the arms of the gov.

In America, sadly, the story is different, though I'd say that for long time banks and the gov shared control of the CB.

Thu, 06/14/2012 - 17:17 | 2527262 akak
akak's picture

What's wrong with monetary freedom and NO government-run central banks in the first place?

Fri, 06/15/2012 - 02:31 | 2528481 Ghordius
Ghordius's picture

then you have an effect called Dollarization - good article here

Thu, 06/14/2012 - 19:20 | 2527551 koperniuk666
koperniuk666's picture

walkure - you are a thick tosser.
This scheme is dreamt up and managed by the Politicians.

Can you really not see this?? !!

Why the fuck are you here on ZH if you do not have the capacity to read and to learn?

go back and vote SPD again you useless fuck and lets get this over with.

Thu, 06/14/2012 - 11:16 | 2525743 Nobody For President
Nobody For President's picture

Who thinks this shit up?


Rube Goldberg, Doctor.

Thu, 06/14/2012 - 11:46 | 2525886 Non Passaran
Non Passaran's picture

Yes, that's well known, but few people talk about the other side of the coin (which I find even funnier), and that is Germany who gets paid to take money and then lends it to PIIGS at 3% of whatever that rate is. 

That sounds like a great business model. The only problem is that like China, they may not see their monies again.

Thu, 06/14/2012 - 11:03 | 2525665 cherry picker
cherry picker's picture

US Current account deficit $137 Billion, unemployment going up, $16 trillion in debt.  European governments and banks have trouble treading water and they are getting tired.

Yet I see ads for high ticket items like cars, homes and art like never before. 

Stock market hasn't tanked yet with all this good news in the air.

Confusing as hell, isn't it?

Thu, 06/14/2012 - 11:05 | 2525671 Dick Darlington
Dick Darlington's picture

Just look at Slovenian govt bonds late last yr when spanish and italian bonds blew up. They did too, big time, and were saved by the LTRO death decision by ECB. They haven't exploded now when Italy and Spain are heading to the gutter. Lots of downside dead ahead boys and girls... Get out while u still can.

Thu, 06/14/2012 - 11:16 | 2525747 youngman
youngman's picture

Its a Slovenian Slope once it gets started.....

Thu, 06/14/2012 - 11:43 | 2525878 Non Passaran
Non Passaran's picture

Their banks took a crapload of LTRO money.  No wonder they can't find "investors".  

Too bad the Swiss pegged CHF to Euro, that ruined all the fun with CHF-denominated loans in the Central and East Europe.

Thu, 06/14/2012 - 11:06 | 2525675 Spastica Rex
Spastica Rex's picture


Thu, 06/14/2012 - 11:30 | 2525831 GMadScientist
GMadScientist's picture

Bleeding of some kind will mos def take place.

Thu, 06/14/2012 - 11:48 | 2525897 Spastica Rex
Spastica Rex's picture

Will it be Christ-like?

Thu, 06/14/2012 - 11:07 | 2525684 walküre
walküre's picture

It's a non-issue.

ESM won't get ratified on June 29th in German parliament.

Vast majority of Germans are dead set against it because get this .. since the Spanish drama they actually GET IT and understand that everyone is looking for Germany as the CONTRIBUTOR of last resort.

Without Germany there is NO ESM and there are no bailouts. All these mind games are futal exercises and just increasing the potential for a full on EURO collapse and EU break-up.

Greece votes on June 16th and the outcome will be another stalemate at best or at worst a Greek exit (whether voluntarily or by RSVP).

Thu, 06/14/2012 - 11:52 | 2525917 americanspirit
americanspirit's picture

walkure - Germany isn't the only EU country that hasn't/won't ratify the ESM. I believe there are 6-7 others who have not ratified, and then there's Finland who has ratified conditional upon the ESM receiving actual collateral for funds it uses to 'bail out' various broke entities. In other words, there really is no ESM - just a lot of vested interests talking as if it already exists.

Thu, 06/14/2012 - 12:03 | 2525929 Ghordius
Ghordius's picture

+1 here - France and Slovenia are through


Though in the long term this one (the "Austerity Compact", aka "let's behave as grown-ups" compact) is much more important

and the Irish had a referendum on it! of course you don't want to talk about this on the MSM


not that sure that Germany and Finland will not sign if everybody else does

Thu, 06/14/2012 - 13:07 | 2526222 walküre
walküre's picture

Well Spain's contribution the ESM of 93 billion Euro is probably out when their own banks need 100 billion. Could be wrong but Spain insisted for the longest time they would be able to solve their own banking crisis. But they can't anymore.

Ghordius, I will buy your debt if you buy mine and in the process we get stinking filthy rich .. or can at least pretend?

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